The Neuren Pharmaceuticals Ltd (ASX: NEU) share price is pushing higher on Tuesday.
In morning trade, the pharmaceutical company's shares are up 1.5% to $23.45.
This latest gain means that its shares are now up an incredible 48% in the space of a month and 100% in just three months.
Why is the Neuren Pharmaceuticals share price on fire?
Investors have been fighting to get hold of the company's shares in recent months for a number of reasons.
One is the significant early success of its Daybue product for the treatment of Rett syndrome in adult and paediatric patients two years of age and older.
It developed the product and then signed over the rights to Acadia Pharmaceuticals (NASDAQ: ACAD). This means it can focus on other developments and watch the royalties and milestone payments come in. And they certainly were flooding in during 2023!
During the third quarter of 2023, Arcadia reported net sales of Daybue in the United States of US$66.9 million. It also provided guidance for fourth-quarter net sales of between US$80 million and US$87.5 million.
This meant royalty payments of A$10.4 million in the third quarter and forecast royalties of A$12.5 to A$13.7 million for the fourth quarter, which will bring its full-year royalties to between A$26 million and A$28 million.
But management isn't resting on its laurels. It is developing new products for unmet needs that could give its earnings a major boost.
One of which, NNZ-2591, has shown significant promise in the treatment of Phelan-McDermid syndrome. And with no approved treatment for the condition currently, this bodes well for those living with the syndrome and shareholders.
Bell Potter responded very positively to the trial results for NNZ-2591. It commented:
We have far greater confidence in NNZ-2591 following the Phase 2 results and therefore materially increase our Probability of Success in PMS and the other three indications which are similarly characterised disorders.
Can its shares keep rising?
While the huge returns may now be behind us, Bell Potter sees scope for the Neuren Pharmaceuticals share price to keep rising.
Its analysts have a buy rating and a $27 price target on its shares. This implies a potential upside of 15.2% for investors over the next 12 months.
